Franklin Templeton has launched the first salvo in the spot Ethereum ETF “fee war” by disclosing its fees in an amended S-1 application. This announcement, highlighted by ETF analyst Eric Balchunas, marks a significant development in the competitive landscape of Ethereum ETFs.
Franklin Templeton’s Fee Strategy
On May 31, Franklin Templeton, a major American investment firm, filed an amended S-1 application for its proposed spot Ether exchange-traded fund (ETF). This filing is notable as it is the first among its competitors to reveal the fees to investors. According to the United States Securities and Exchange Commission (SEC) filing, the sponsor’s fees will accrue daily at an annualized rate of 0.19% of the fund’s net asset value.
Industry Reactions and Comparisons
Bloomberg ETF analyst Eric Balchunas quickly commented on the announcement via an X post, stating that “the opening shot in the ETH ETF fee war has been fired from Franklin.” He emphasized that this fee structure appears permanent, mirroring Franklin’s spot Bitcoin ETF product.
Sponsor fees, which cover administration expenses, are a critical factor for investors selecting ETF products, as they typically prefer options with lower fees. Despite the simultaneous filing of amended S-1 applications by VanEck, Invesco, and Galaxy, none of these firms disclosed their sponsor fees, leaving Franklin Templeton as the sole discloser at this time.
Also Read: BlackRock’s S-1 Fuels Optimism for June Ethereum ETF Launch
Historical Context of ETF Fee Wars
The concept of “fee wars” is not new. Before the launch of spot Bitcoin ETFs in January, issuers frequently amended S-1 filings to adjust fees competitively. Some firms even waived fees to attract investors. For instance, Bitwise waived all fees on its spot Bitcoin ETF for the first six months of trading and for the first $1 billion in assets.
Future Prospects and Market Impact
Grayscale Investments and BlackRock recently submitted amendments on May 30 and May 29, respectively. Balchunas views these amendments as positive indicators, suggesting that other firms will likely follow suit soon. He anticipates another round of adjustments to address SEC comments but believes that the launch of a spot Ether ETF by the end of June is a “legit possibility.”
As the industry waits for further developments, Franklin Templeton’s proactive fee disclosure sets the stage for what could be a highly competitive market for spot Ethereum ETFs.
